Level of interest for area commercial license remains up in the air

The level of interest in a commercial casino license for Southeastern Massachusetts likely will turn on whom potential investors believe.

Steve DeCosta

The level of interest in a commercial casino license for Southeastern Massachusetts likely will turn on whom potential investors believe.

When the state Gaming Commission agreed last week to solicit applicants for a commercial license in the area, also known as Region C, it admitted the license might never be issued. It acknowledged that the progress the Mashpee Wampanoag make toward securing the federal approvals needed to operate their proposed sovereign casino in Taunton could affect the viability of a commercial operation.

Commercial applicants need to pay a $400,000, nonrefundable fee to be prequalified as potential licensees, then spend even more to develop site-specific plans for a showdown with other applicants in the region.

A potential investor who believes the tribe's contention that it is well on its way to getting land in trust might not be willing to risk that investment.

If, on the other hand, an applicant believes the legal contention that the tribe cannot qualify for land in trust or could be tied up for years in legal challenges, then it might be worth the risk.

Which way will it go?

It depends on whom you ask.

"While the commission has opened the bids up, I do wonder how many private operators will bid, especially with the Boston license being so heavily contested," said Richard McGowan, a Boston College economist who studies gaming. "Even the western license seems more attractive."

But Clyde Barrow, director of the UMass Dartmouth Center for Policy Analysis, which has studied the New England gaming scene for more than a decade, sees it differently.

"I think that opening the southeast to commercial bids will generate some commercial interest, because the initial application fee is modest — a mere $400K," Barrow said.

He also contended that unsuccessful applicants for licenses in the state's other two regions, where deadlines already have passed, could get a second bite at the apple.

"As time goes on, it's possible that some competitors from Regions A and B will move to the Southeast," Barrow said. "The losers in those regions may decide to take a second chance in Region C," having already been prequalified and not having to pay a second $400,000 fee.

While the tribal preference for the Region C license may have previously put a chill on proposed investors, Elias Patoucheas, president of Claremont Companies, said he sees that changing.

Claremont owns 170 acres at the intersection of Interstate 495 and Route 24 in Bridgewater, which it has been pitching to potential casino developers.

"We've spoken in the past with many of the world's largest gaming operators," Patoucheas said. "All of them expressed interest in Southeastern Massachusetts, but (because of the Indian preference) they weren't willing to invest their time or money. I'm sure they're feeling different about that now."

The only announced commercial proposal in Region C has come from KG Urban Enterprises, a New York-based developer that wants to build a casino at an abandoned power plant on the New Bedford waterfront.

Managing Director and Principal Andrew M. Stern said KG would pursue a commercial license regardless of what the tribe does. He claimed that the commission vote set up "the same process specified in other regions," meaning that the issuance of a license will be based on "commercial viability and merit."

"We don't believe our commercial viability and merit is affected one way or the other if the tribe gets to build a (federally sanctioned) casino."

Still, KG will continue its legal challenge of the tribal preference, now progressing through U.S. District Court.

"We went these 15 months down the road," Stern said. "The judge himself said the case is not moot" following the commission's decision. "Let's let him render a decision. There's no reason not to."

Stern further claimed that a decision in the lawsuit "removes any doubt" and "buttresses the commission's decision by making it impervious to legal challenge."